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JOINT-CIRCULAR No. 07/1997/TTLT-BTM-BNV-BTC-TCHQ OF OCTOBER 21, 1997 GUIDING THE COMBAT AGAINST SMUGGLING UNDER RESOLUTION No.85/CP-m OF THE GOVERNMENT AND THE CO-ORDINATION OF ANTI-SMUGGLING FORCES

In furtherance of Resolution No. 85/CP-m of the Government dated 11 July 1997 on the combat against smuggling and the Prime Minister’s directions in Document No. 5670/KTTH of November 7, 1996 regarding the coordination of forces to combat the circulation inside the country of illegally imported goods the Ministry of Trade, the Ministry of Finance, the Ministry of the Interior and the General Department of Customs hereby jointly provide specific guidance on the following issues to be implemented by branches and localities:

I.- GENERAL PROVISIONS

1.- The ministries, the ministerial-level agencies, the agencies attached to the Government and the People’s Committees of provinces and cities directly under the Central Government shall combat smuggling according to their respective assigned functions, duties and powers in accordance with Decision No.96-TTg of February 18, 1995 of the Government promulgating the Regulations on responsibilities for coordination of activities and relations among State management bodies in the market management against smuggling and illegal trading acts.

2.- Imported goods of business organizations and individuals which are circulated on the market include goods displayed for sale in shops, stored in warehouses and transported on road must have receiptsand vouchers proving their lawful origins of importation. The imported goods must be transported via the prescribed border gates, declared and complete all required customs procedures.

3.- Owners of transport means and persons involved in transporting contraband goods and heads of the involved units shall be handled in accordance with the law currently in force, depending on the seriousness of the violations.

4.- The specialized agencies shall have to intensify the inspection and direction of the anti-smuggling work, bring into play the role and responsibility of their officials and combat all negative signs and acts. Procedures shall be carried out only for imported goods having valid vouchers as stipulated by current laws. Organizations and/or individuals that act against the regulations shall be dealt with by law.

II.- SOME SPECIFIC GUIDANCES ON INSPECTION AND HANDLING OF VIOLATION

1.- Illegally imported goods referred to in this Circular include:

1.1. Goods which are banned from importation under current regulations.

1.2. Goods which have been imported not through the prescribed bordergates or which have not made customs declarations.

1.3. Imported goods which are displayed for sale at shops, stored in warehouses or transported on road without receipts and vouchers to prove their lawful origins of importation or with receipts and vouchers which are not valid under the regulations of the Ministry of Finance.

1.4. Goods subject to import label under the State regulations but not labelled.

2.- The subjects and localities to be inspected:

2.1. Imported goods of business organizations and/or individuals of all economic sectors, having sign(s) of violating paragraph 1 of Part II of this Circular.

2.2. Transportation means showing sign(s) of being used for the transport of illegally imported goods;

2.3. Areas along the border lines, coastal areas and places for gathering and consuming illegally imported goods, trade centers; places of storing and hiding illegally imported goods.

3.- Inspection and handling of violations:

3.1. From December 1st, 1997 all imported goods which are being sold without legal and valid vouchers and receipts shall be confiscated and strictly dealt with according to law;

3.2. Inspection contents:

- The observance of the regulations on business registration and business license of individuals and organizations trading in imported goods;

- Receipts and documents of imported goods as prescribed in Point 1, Part II above;

- Goods being transported on road and showing signs of being imported illegally. Inspection of such goods must comply with the current regulations and be carried out mainly at the departure and destination points;

- With regard to railways, airways and postal transport means, if there are grounds to suspect that such means are used in the transportation of illegally imported goods, the inspection and supervision bodies are entitled to request the specialized management agency to coordinate in such inspection.

3.3. Handling of violations:

- Upon detection of any violation, the inspection forces shall have to strictly follow the order, procedures and competence for sanction in accordance with current regulations. All inspection and supervision forces are forbidden to use blank paper to make inspection records;

- If the inspection requires the coordination between several agencies, the agency authorized to take charge of the inspection and supervision force shall be entitled to issue the handling decision. If such decision is beyond its jurisdiction, it must report to the competent higher agency for decision. Before issuing a handling decision, there must be a written agreement among the involved agencies, signed by their representatives;

- The temporary seizure of material evidence and/or instruments of violation shall have to comply with current law;

- Administrative violations shall be dealt with on the basis of legal administrative documents; criminal offences shall be dealt with according to criminal legislation;

- With regard to transport means:

+ Transport means including State-owned transport means carrying contraband or banned goods shall be impounded and dealt with depending on the seriousness of the violation;

+ If the owners of transport means of State agencies, socio-political organizations and whatever economic sector intentionally use such means to transport illegally imported goods, the means shall be confiscated, the business license (if any) shall be withdrawn and they shall be administratively sanctioned or examined for penal liability, depending on the seriousness of the violation;

+ If the operators of the means intentionally transport contraband goods, their driving licenses shall be withdrawn and they shall be administratively sanctioned, have to make compensation if the means are confiscated, or be examined for penal liability in case of serious offences.

3.4. Handling of confiscated goods:

- If the confiscated goods are illegally imported State property, they must be managed in accordance with current law.

- If they are drug, firecracker, harmful cultural products, harmful children toys or goods harmful to the users’ health or the environment, they must be destroyed in accordance with the provisions of law.

- If they are weapons of any type, military supplies and equipment, valuable exhibits of historical prestige, medicines for people, domestic animals, plant or animal breeds, wild animals of precious and rare species, they shall be handed over to specialized management agencies for settlement;

- The illegally imported goods which have been confiscated shall be disposed of as follows:

+ If the confiscated goods illegally imported are allowed to be sold on the market, auction shall be organized as prescribed in Decree No.86/CP of December 17, 1996 of the Government and Decision No.100/TC/QLCS of January 23, 1997 of the Ministry of Finance promulgating the regulation on the management and disposal of assets after the decision on requisition thereof to the State funds is made and the State ownership thereof is established;

+ Confiscated illegally imported cigarettes shall be handled as follows:

a/ They shall be re-exported as prescribed in Official Dispatch No.410/KTTH of January 24, 1996 of the Prime Minister.

b/ They shall be sold on the domestic market in accordance with Official Dispatch No.4460/VI of September 6, 1997 of the Prime Minister. The consumption of illegally imported cigarettes on the domestic market shall comply with the following regulations:

* Based on the volume of confiscated cigarettes illegally imported, the provincial municipal Trade Departments shall formulate a plan to be submitted to the People’s Committee of the province or city directly under the Central Government for consideration and decision to assign the sale thereof to 1 to 3 eligible local State-owned stores in accordance with the regulations of the Ministry of Trade.

* These stores shall only be entitled to receive and sell the illegally imported cigarettes which are confiscated and handed over by the anti-smuggle inspection and supervision forces together with the decision on each hand-over and shall have to open books of accounts and use vouchers and receipts as prescribed.

* Upon receipt of confiscated cigarettes illegally imported from the specialized agencies, such stores shall have to make payment to the deliverer through a custody account at the State Treasury. The price shall be submitted by the Price-setting Board to the provincial and municipal People’s Committee for approval (the members of this Board shall be decided by the provincial/municipal People’s Committee).

The provincial/municipal Trade Departments shall provide management regulations and direct the local agencies in charge of market management to regularly inspect and supervise operations of the stores selling confiscated cigarettes illegally imported.

3.5. All the money received during the inspection, inspection expenses, collected fines, turnover from sale of confiscated goods, and money deducted as rewards for participating individuals and forces shall be accounted for in accordance with the guiding documents of the Ministry of Finance.

The financial branch shall have to examine the deductions for reward and remittances to the State Budget in accordance with current regulations.

III.- ORGANIZING THE COORDINATION AMONG FORCES

A.- Coordination contents:

1.- Drawing up plans and options against illegally imported goods.

2.- Exchange of information on smuggling, illegal business and market forecasts...

3.- Direction and conjoint application of administrative, economic, educational and dissemination measures.

B.- Areas

1.- Along the land borders and on the sea.

1.1. The organization of anti-smuggling activities on the sea shall continue to comply with Directive No.701-TTg of October 28, 1995 of the Prime Minister.

1.2. The People’s Committees of provinces and cities directly under the Central Government, particularly the border and coastal provinces, shall perform the comprehensive State management over the combat against smuggling in their localities.

- To closely direct branches, border and coastal communes and districts and to educate the people not to smuggle and transport smuggled and contraband goods.

- To closely control porters engaged in cross-border transport.

- To abide by the regulations on residence management so that bad elements cannot operate in the border areas;

- To direct forces to combat smuggling on trails, canals and estuaries.

1.3. Customs forces shall assume the prime responsibility and coordinate with border guards, police, market management, maritime forces in border and coastal provinces in enhancing the measures to prevent illegally imported goods from infiltrating into the country. In case of necessity, a joint force shall be organized to combat smuggling with the customs assuming the prime responsibility, to closely examine imported and exported goods, to carry out the customs procedures as prescribed, to combat trade frauds and other negative acts.

2.- On the domestic markets:

The market management forces shall assume the prime responsibility and coordinate with the police, the tax authorities and, where necessary, with the customs authority in directing, managing and guaranteeing the observance of law during their examination and inspection in order to better perform the following tasks:

2.1. Based on the results of business registration and re-registration according to Directive No.657-TTg of September 13, 1996 of the Prime Minister, to associate the business registration with the management of tax collection. All business establishments must conduct business activities in conformity with their registered business lines and strictly comply with the regulations on accounting, receipts and vouchers of the Ministry of Finance.

2.2. To concentrate forces on firmly controlling all the business establishments trading in imported goods. To enhance the examination, supervision, inspection, investigation and handling of subjects engaged in the trading, transport, storing or concealing illegally imported goods, banned goods or imported goods without valid vouchers. For the immediate future, focus should be placed on a number of import items such as bicycles, electric fans, electronic products, motorbikes, cars, construction materials, canned food, cigarettes, wine, fabrics, used clothes.

2.3. To strictly deal with acts of smuggling. Any criminal offences must be forwarded to law enforcement bodies for inspection and settlement according to criminal procedures, and must not be kept for administrative sanctions.

C.- Assignment of responsibilities

1.- At the center

Each ministry and general department shall appoint a leading official to take part in the direction work and assign the following agencies to act as assisting and coordinating bodies:

- The Market Management Department of the Ministry of Trade;

- The General Department of Taxation under the Ministry of Finance;

- The Department of Economic Police (C15), the General Department of People’s Police of the Ministry of the Interior;

- The Department of Inspection against Smuggling of the General Department of Customs.

The ministries and general departments shall have the following duties:

1.1. The Ministry of Trade

- To summarize information on the struggle against the circulation of illegally imported goods on the market provided for by the ministries, general departments and localities at the same level, inform the ministries and general departments thereof and report it to the Government;

- To propose policies and necessary measures to combat illegally imported goods, consult ministries and general departments in proposing them to the Government and direct localities in the implementation thereof;

- To assume the prime responsibility for organizing the coordinated inspection and urge localities in the implementation thereof;

- In case of necessity, to coordinate with relevant ministries, general departments in establishing joint inspection teams and request such ministries and general departments to provide forces and means for the teams so as to promptly prevent, arrest and deal with the cases of illegal import, commercial fraud and tax evasion, particularly big and complicated cases involving many localities, which a single locality is incapable of settling;

- Periodically, from the 5th to the 10th of each month to hold an inter-ministerial meeting in order to draw experiences and discuss measures for coordination in direction in the period to come.

1.2. The Ministry of Finance

- To issue circular(s) guiding the implementation of Resolution No.85/CP-m of July 11, 1997 of the Government and Decision No.984-TTg of December 30, 1996 of the Prime Minister regarding the regulation on the management and use of money received from anti-smuggling operations including pecuniary rewards for individuals and collectives with merits therein.

- The General Department of Taxation shall direct its affiliates to coordinate with market-management sub-departments in compelling business establishments to open books of accounts and use, receipts and vouchers as stipulated.

1.3. The Ministry of the Interior

Shall direct the general departments and police offices of all levels:

- To coordinate with market management units and inspection forces in controlling and preventing the cross-border transport of illegally imported goods into the country and severely dealing with persons who oppose officials on public duty.

- To focus on the investigation and detection of smugglers and big smuggling rings, with special attention being paid to types of goods harmful to social security and order.

- To join various branches in directing and guiding localities in the fight against smuggling.

1.4. The General Department of Customs

To assume the prime responsibility in performing the duties defined in Point 1.3, Section B, Part III of this Circular; direct local customs offices to coordinate with local authorities in preventing the infiltration of illegally imported goods across the border in any form.

2.- At the local level

- The People’s Committees of provinces and cities shall be responsible for the smuggling situation in their respective localities;

- To organize well the coordination between the market management forces, tax offices, police and customs authorities in inspecting and controlling the circulation of illegally imported goods in their respective localities. Each unit of the above-mentioned forces shall appoint a leading official to participate in directing the implementation of the above stipulations;

- The market management sub-department shall act as the standing body to assist the provincial and municipal People’s Committees in the elaboration of anti-smuggling plans and measures;

- When an investigation of smuggling rings, or places of storing illegally imported goods is related to any locality, there must be a close coordination with the specialized agencies in that locality;

- To hold monthly inter-branch meeting so as to draw experiences, discuss follow-up measures and summarize the situation to report to the provincial and municipal People’s Committees and the Ministry of Trade (Market Management Department) for sum-up reports to be submitted to the ministries and the Government.

IV.- ORGANIZATION OF IMPLEMENTATION

1.- The ministries and ministerial-level agencies, agencies attached to the Government shall examine all units under their management and strictly deal with organizations and/or individuals directly or indirectly involved in smuggling;

2.- The Ministry of Trade shall, together with the Ministry of the Interior, the Ministry of Finance and the General Department of Customs, coordinate with mass media agencies in the dissemination of the Government’s policies against smuggling in the spirit of the Government Resolution and this Circular.

3.- The People’s Committees of provinces and cities directly under the Central Government shall launch a campaign to disseminate the Government’s policies on the combat against smuggling to the whole population in the wards and communes and all the traders so as to cerate a mass movement to combat smuggling, not to join hand with smugglers, to discover and provide information on any individuals and organizations committing acts of smuggling, concealing, or selling illegally imported goods or discover breaches or negative acts of anti-smuggling staffs. All the smuggling cases in their localities must be strictly dealt with.

4.- The provinces and cities directly under the Central Government shall have to submit monthly and quarterly reports on the results of the anti-smuggling combat in their localities to the ministries with a view to a general report to the Prime Minister.

5.- This Circular shall take effect 15 days after its signing. All the earlier regulations contrary to this Circular shall be repealed. In the course of implementation, any problem shall be reported to the higher-level management bodies for settlement.

For the Minister of the Interior

Vice Minister

VO THAI HOA

For the Minister of Finance

Vice Minister

VU MONG GIAO

For the Minister of Trade

Vice Minister

DO NHU DINH

For the General Director of the General Department of Customs

Deputy General Director

NGUYEN DUC MINH